Modern hardware does not need texture atlases as it can use a different texture for every pixel. Texture atlas is a workaround for the API that only allows one set of textures per primitive and imposes a huge overhead on each primitive at the same time (e.g. OpenGL, DirectX).
Are there no alternative to texture atlases? It seems weird to restrict yourself to merging in only one direction just because the representation of your texture won't allow it.
As for the bleeding, I suppose it's because the scaling kernel overlaps between the tiles in the atlas? Won't reducing the level of mipmapping degrade overall performances?
It seems weird to me that there's no better hardware support for texture atlases if it's so popular.